In a notable divergence from a generally cooling global mergers and acquisitions (M&A) market, European hotel investment has demonstrated resilience in the first quarter of 2025. Total investment for the period reached close to €5bn, a figure that not only signifies strong activity but also surpasses the ten-year average, according to the latest ‘European Hotels Figures’ report from CBRE. This robust performance signals sustained investor confidence in the continent’s hospitality sector.
This positive trend in Europe stands in contrast to the broader global picture. A recent ‘Hospitality & Leisure: US Deals 2025 Mid-Year Outlook’ from PwC, utilising S&P Global Market Intelligence data, revealed that the total value of hospitality and leisure deals completed by mid-May 2025 was around $4bn – less than half the value seen in the first half of 2024. PwC cited factors such as high borrowing costs, valuation mismatches and policy uncertainty as contributors to this slowdown, particularly impacting private equity-backed transactions.
Despite these global headwinds, strategic acquisitions continue to take place across Europe. Analysis from CBRE further indicates that the ‘Big Five’ markets – Italy, Spain, Germany, France and the UK – continue to be the primary drivers of growth, accounting for 66% of total night stays. However, smaller destinations are also gaining momentum, suggesting a broadening appeal for hotel investment across the continent.
This resilient investment activity in Europe is underpinned by optimistic operational forecasts. RevPAR in Europe is projected to index higher than ADR in 2025 due to a greater return of occupancy, nearing pre-pandemic levels. Furthermore, demand forecasts for 2025 show an increase across all categories, with particularly strong growth expected from international inbound travel.
